A 10% inflation rate means that
A)prices of some important goods and services have increased by 10%.
B)every price in the economy has increased by 10%.
C)the money supply has increased by 10%.
D)the price level has increased by 10%.

Question

Quizplus · Accepted Answer

A 10% inflation rate means that the price level, in general, has increased by 10%. This means that the average price of goods and services has gone up by 10%. It does not necessarily mean that every price in the economy has increased by 10%, nor does it mean that the money supply has increased by 10%.

A 10% Inflation Rate Means That